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Walker Says 'No' to Federal Medicaid Expansion

MADISON, Wis. (AP) - Gov. Scott Walker announced Wednesday that he won't propose expanding Medicaid services in Wisconsin, joining other Republican governors who have decided to reject federal money for covering more low-income residents under the health care overhaul law.

Instead, Walker outlined a hybrid approach that would allow more adults into the state health program, which he said would help cut the state's uninsured rate of 14 percent in half.

"I want to have fewer people in the state who are uninsured, but along with that I'd like to have fewer people in the state who are dependent on government," Walker said in describing his plan.

The decision came as a disappointment for the Obama administration and health care advocacy organizations, including Wisconsin hospitals, who had urged Walker to accept a broader expansion of the Medicaid program and take the billions of dollars in federal money that would come with it. Walker's proposal would not add to spending for low-income residents, but he was increasing overall spending on Medicaid programs by about $650 million over two years.

"I'm not certain what Gov. Walker is trying to prove," said Democratic state Sen. Jon Erpenbach. "If we do not take this money, it's going to go to other states."

Walker became the 14th Republican governor to reject the Medicaid expansion as too costly in the long term. Six other Republican governors have decided to go along with the expansion. Overall, 19 states plus the District of Columbia appear to be on track to expand their Medicaid programs, with 17 still uncommitted.

The split indicates that the ranks of the uninsured may vary considerably between states after the new health overhaul goes into effect in 2014, despite health care reformers' efforts to make coverage almost uniform. The federal plan was designed to achieve blanket coverage by requiring those who can afford insurance to buy it, by providing subsidies to those who need financial help and by getting states to expand Medicaid to include more working poor residents.

Walker has been an outspoken opponent of the health care overhaul law as an unjustified expansion of government.

"He's trying to muddy the waters of his bad decision by laying out a convoluted, uncertain plan and labeling it a 'hybrid' when he is actually taking an extreme path rejected by many conservative Republican governors," Barca said.

Republican leaders were quick to praise the plan although Walker provided few details. With Republicans controlling both houses of the Legislature, passage is all but certain.

Republican Assembly Speaker Robin Vos called it a "good hybrid" that reaffirms Medicaid as a program that takes care of the state's poorest residents, while allowing others to buy private insurance through a new government-sponsored online marketplace, called an exchange. Republican Sen. Alberta Darling, co-chair of the Legislature's budget committee, called the proposal "sensible and responsible."

Under Walker's plan, income eligibility for non-elderly adults would be cut in half from 200 percent of federal poverty level to just 100 percent. But more childless adults who are now excluded from the program would be admitted. Although the full expansion would add 175,000 more adults than Walker's proposal would, many of these people would become eligible for government subsidized coverage when the new federal exchanges go into operation, state officials said.

No one would be forced off Medicaid until the new federally run exchange begins offering subsidized insurance plans, Walker said.

Dennis Smith, secretary of Walker's Department of Health Services, said the plan would need federal approval, but that he expected to receive it based on earlier guidance from the Department of Health and Human Services.

Judy Solomon of the Center on Budget and Policy Priorities in Washington, said that Wisconsin officials may be able to negotiate with HHS over receiving some federal money.

Had Walker accepted the expansion, the federal government would have paid all the additional costs for expanded Medicaid for the first three years, and at least 90 percent afterward. But Walker and other Republicans raised concerns that the state's share would escalate over time.

Under a full expansion, the state would have received $4.4 billion in federal money through 2020, according to Wisconsin's nonpartisan Legislative Fiscal Bureau said. But over four years, starting in 2016, new costs to the state would have totaled about $133 million.

Earlier this month, facing a similar choice, Michigan's Republican Gov. Rick Snyder announced he would propose accepting the federal terms. But the more conservative Republican governors in the region, including Sam Brownback of Kansas and Mary Fallin of Oklahoma, have balked. Fallin and Iowa's Republican governor, Terry Branstad, have said they are exploring ways of providing more health care coverage with lower costs and greater flexibility.

"We need to get those who lack quality affordable health care in the system so our hospitals do not have to shift the costs of uncompensated care and emergency room visits onto our businesses and families," Kind said.

About 1.2 million people are covered by one of the state's Medicaid programs, such as BadgerCare Plus and SeniorCare.